The escalating Russia/Ukraine conflict continues to put downward pressure on equity markets. The DOW, S&P 500 and NASDAQ are now approaching and testing their Feb. 24 lows where they may find some support. We are now in the center of our current general reversal zone (March 1 - 10), so a new bottom or "double-bottom" could form now. If one or two, but not all three, indices go below their Feb. 24 lows, we could get a bullish divergence signal, and that could also suggest the formation of a significant bottom. On the other hand, if all three indices break and close below their Feb. 24 lows, it would be a bearish sign suggesting a deeper correction is underway. We are still holding our short position in the NASDAQ. We will consider covering this position and taking good profits if it looks like a significant low is forming this week.
Investors/traders may now be fleeing equity markets to invest in the perceived "safe haven" markets of gold and silver as well as the U.S. Dollar Index. (The greenback is also benefiting from recent hawkish rhetoric from the Fed.)
Gold and silver prices both surged to new highs today with gold touching the $2000 mark and silver hitting $26. We are now in the center of a a general reversal zone that applies to all our markets, so a top and some sort of correction could be imminent. But because we will not have any bearish divergence between the two metals this week, we may not see any top until next week when we enter another reversal zone specifically for the precious metals (March 16 - 22). We are still on the sidelines of both metals as we have not seen any significant corrections to buy. Because the U.S. dollar is moving up WITH gold and silver, we cannot use it right now as a contra-indicator for these metals.
Crude oil's price is, of course, benefiting from the Russia/Ukraine war. Today crude surged to $130 -a new 10-year high! - before backing down and closing around $120 (April contract chart). Today we entered a new reversal zone specifically for crude (March 7 - 14), so a top could also be forming in this market. The war is a "wildcard" factor now strongly influencing the price of crude, and that makes this market very volatile. It is certainly too late to chase this rally. We may consider buying at the bottom of any significant correction, but for now we will remain on the sidelines of crude.